Getting the most out of your money is an important task for every individual. To ensure this, one thing to do is to avoid leaving large balances in their savings bank account. This can be achieved by keeping the balance slightly above the required minimum. If this is not done, then there would be charges that would be levied for non-maintenance of the balance. Many people opt to open a zero-balance account to evade this situation, but caution is necessary as some banks have been imposing charges on these accounts without authorisation.
Zero Balance Account
As the name suggests, a zero-balance account is one where the account holder does not need to maintain a certain minimum balance in their account.
When one considers a normal savings account, there is a minimum balance requirement. All the money lying in the savings account is the property of the account holder, and they can issue cheques or use the money present down to the last rupee. It is also important for them to maintain a certain average balance. If they fail to maintain this, the bank will impose charges on the account holder.
However, the zero-balance account takes care of this problem because there is no need to maintain any balance in the account. Even if the balance in the account is a few rupees, there will not be any problem, and the bank will ensure that the account facilities as outlined will be provided without any charges. Using this account is a way to ensure that the individual does not have to worry about how much money is present in the account at all times, as long as it is positive.
Charges Levied
The Reserve Bank of India has seen that there have been several cases where banks have levied charges on holders of zero-balance accounts due to the holder not maintaining the required balance. This fact alone violates the rules, as the nature of the account necessitates no balance maintenance. The levied charges don't align with the rules, and this shouldn't have happened. This is a breach of the account's basic conditions, and as a result, it should not have occurred.
The RBI has even penalised banks for this kind of behaviour, and this is something that the bank account holder needs to be aware of.
Maintaining Vigil
To prevent them from unintentionally paying charges, it is necessary to ensure that account holders are aware of the entire situation. First, the bank account holder has to know the kind of account that they have opened. Many people conduct extensive research before opening an account, evaluating options to determine whether it's a standard account, a special account, or a zero-balance account.
However, once the account is opened, people tend to forget about this step. Once they understand the type of account, they should also closely monitor all the transactions occurring within the account. This encompasses all receipts and expenses credited to the account. Developing this habit will ensure that the account holder is aware of what is happening to their account, allowing them to investigate any transactions they are unsure about or suspect.
The nature of any charges that are levied on the account should be determined if they find that some amount has been debited from their accounts. This is crucial because it allows them to identify any erroneous levies. If the bank imposes a charge for failing to maintain the minimum balance for a zero-balance account, the account holder must inform them so they can reverse the charge, as it shouldn't have occurred. If the bank refuses to do so, the account holder can also file a complaint with the ombudsman and regulator to get this matter resolved.
Arnav Pandya is founder of Moneyeduschool
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